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FactCheck: What effect does JobBridge and other schemes have on our unemployment rate?

TheJournal.ie’s GE16 FactCheck examines an issue that’s on a lot of people’s minds.

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AS PART OF our GE16 FactCheck series, we’re testing the truth of claims made by candidates and parties on the campaign trail.

If you hear something that doesn’t sound quite right, or see a claim that looks great, but you want to confirm it, email factcheck@thejournal.ie.

Quite a few people have asked about job activation schemes and our unemployment levels, including Derek Larney in Dublin North West.

So we’ve had a look at the facts and figures involved.

CLAIM: Job activation schemes are masking the actual pace of economic recovery
Verdict: Half TRUE.

What was said:

It’s a claim that has been widely made over the last couple of years, but was broadly articulated by Sinn Féin TD Peadar Toibín during a debate about employment and the recovery on TV3′s Tonight With Vincent Browne last week.

If you take underemployment, if you take activation, if you take 147,000 people who’ve emigrated, and the 180,000 people who are unemployed, well over half a million people are the collateral damage of this government’s economic policies.

The facts

90405523 Source: RollingNews.ie

Emigration

A quick note on this issue.

Of course, there is abundant anecdotal evidence that those leaving the country since the economic crisis have been disproportionately made up of those on the live register, in unemployment, and forced to search for work abroad.

The argument, as articulated by Peadar Tóibín, is that the drop in the live register and unemployment in recent years is attributable to their leaving Ireland, rather than the result of a solid economic recovery.

Emigration has surged since 2011, and the number on unemployment assistance has fallen significantly.

In truth, however, it is almost impossible to precisely measure the causal relationship between the two phenomena.

Neither the Department of Social Protection nor the CSO track whether a person no longer registered for unemployment assistance has left the country.

For more on emigration and the live register, click here.

Unemployment

We may revisit underemployment (part-time and casual work) in a later FactCheck, but let’s focus on job activation for now, since it has been the focus of quite a few reader requests.

Ireland’s unemployment rate is measured by the CSO, using the International Labour Organisation (ILO) criterion of counting the number of people who worked at least one hour for pay or profit, in the week before being surveyed.

It does not include those on job activation schemes (more on that below).

The current unemployment rate is 8.6%, the lowest it has been since December 2008.

Unemployment was 14.3% in March 2011, when the current government took office, so there has clearly been a significant drop in the jobless rate.

unemployment20112016 Source: CSO.ie

The live register

The live register is, in short, a measure of those unemployed, looking for work, and registering for some kind of unemployment assistance.

It does not include anyone on a job activation scheme.

In December, there were 321,616 people on the live register. In March 2011, when Fine Gael and Labour took office, that number was 441,193, so there’s been a a drop of 119,577, or 27.1%.

livereg20112015 Source: d mg

Employment

The CSO measures the number of people employed in the Quarterly National Household Survey (QNHS), which is released (as the name suggests) every three months.

At the end of September 2015 (the most recent data available), there were 1,983,000 people employed in some way in Ireland.

The number for the first quarter of 2011, when Fine Gael and Labour took office, was 1,841,800, meaning there has been an increase of 141,200 or 7.67%.

employment20112015 Source: CSO.ie

Job Activation

There are five main types of job activation: Back to work; “other” (includes JobBridge, Tus, and Gateway); community employment; Solas (formerly FAS) full-time training; and Back to Education (BTE).

Those enrolled on the employment schemes are considered to be long-term unemployed (12 months or more), and receive a payment of between €20 and €50 on top of their weekly job-seekers benefit and job-seekers allowance, for between 19.5 and 40 hours’ work.

In financial terms, the distinction between those in job activation and those on the live register is just €20-50 a week, which is why many have called for them to be included in the unemployment and live register counts.

Of course, there is an argument to be made that there is a middle-term financial benefit for those on job activation, in the form of future potential full-time employment stemming from the work experience gained on schemes such as JobBridge.

For more detail on each scheme, and what they pay, click here.

In December 2015, the breakdown looked like this, with 82,309 people enrolled across all schemes.

dec15activation Source: CSO.ie

 

As you can see, for all the attention JobBridge has received since 2011, it actually accounts for a very small portion of individuals on job activation.

Between March 2011 and December 2015, there was a 15.89% growth in the number of people enrolled in the schemes – from 71,022 to 82,309.

The schemes reached their peak last spring, when 87,625-89,704 were enrolled between February and April 2015.

Everyone on a job activation scheme is excluded from the unemployment figures and the live register, and most of them are counted as employed in the QNHS.

So let’s see what those measures would look like if job activation was taken into account.

Unemployment: Take 2

unemploymentjobactiv Source: CSO

As you can see, taking job activation into account has a significant effect on the unemployment picture.

By this measure, unemployment would have been 17.59% in March 2011 (as opposed to 14.3%), and 12.62% in December (as opposed to 8.8%).

The reason for those troughs every year is the Back to Education Allowance, which is halted during the summer months.

The live register: Take 2

liveregJA20112015 Source: CSO

In March 2011, the number on both the live register and in job activation was 544,825, and in December that number was 454,408 – that’s a drop of 16.59%.

This indicates that, even accounting for job activation, there has been a significant fall in the number of individuals “signing on.”

Remember, though, that the drop in the live register alone was 27.1%. The gap between the two rates of decline shows the impact of job activation on Ireland’s unemployment landscape.

Employment: Take 2

employmentminusJA Source: CSO

The Solas and Back to Education schemes involve an allowance for training and education, not work, and therefore are not included in employment figures.

But discounting these categories, there were a total of 50,483 individuals on employment activation schemes like JobBridge, Tus, Gateway and community employment in December.

That number in March 2011 was 32,610. That’s an increase of 17,873 or 54.8%.

However, in the context of overall employment, it fades into relative insignificance, constituting just 12.65% of the overall increase in the number of persons employed (141,200).

Because the Quarterly National Household Survey measures employment on a quarterly basis, we have to average out monthly job activation figures in three-month increments.

Then, if we exclude those on employment activation from the total number of persons employed, we’re left with 1,809,306 (as opposed to 1,841,800) in the first quarter of 2011, and 1,932,583 (as opposed to 1 983,000) in the third quarter of 2015.

So, if we leave out job activation, the number of persons employed in Ireland has increased by 123,278 – a rise of 6.8%.

The role of job activation schemes, therefore, appears to have been significant in terms of unemployment and the live register.

However, it doesn’t seem to be having a massive effect on the increase in employment, which has been fairly significant, notwithstanding the level of part-time and casual work, which we hope to address in a later article.

Here’s the overall picture:

overallJApicture Source: CSO

Send your FactCheck requests to factcheck@thejournal.ie

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About the author:

Dan MacGuill

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